Spain: Rajoy plans to raise cash from renewables

Spanish Prime Minister, Mariano Rajoy has told his parliament that tax hikes for the renewable energy sectors would be part of the solution for the €65 billion deficit in the country. He made this statement at the address yesterday, where he called on Spaniards to back the measures that would aid Madrid in cutting its budget deficit through to 2015.

Thr renewables sector could be slapped with a high tax to make up for the country's deficit, adding more burden after the subsidy cuts.

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It is now confirmed that a new "generation tax" is underway under this new energy fiscal scheme. This adds to the burden already carried by the renewable energy sector after the subsidy cuts. Photovoltaic energy is one form that would be charged at higher rates of 19 percent to raise €550 million. Meanwhile, wind power would be charged at 11 percent to gain €440 million, as Reuters reports.

The levy would be imposed to make up the difference between costs and revenue in the electricity sector. About €24 billion in debt has been chalked up by the sector. Spain had always charged consumers less than the cost of energy production, which had led to the deficit. Consumers are apparently requested now to also bear the burden of the taxes.

More information is expected to come to light following the next cabinet meeting this week. Critics have been meanwhile pointing out the potential impact of such measures on the renewable energy sector in the country.